Blog Visitors' CommentsCondo Search's comment..
I just drop by to say "thank you" for your excellent blog, and safe me from committing at a high price and wrong time buying. It helps me a small property hunter(with hard earning money) and others(i believed)a better inform. Thank you again...

Young Buyer's comment...
I've just graduated and started working, and I hope to own a residential property in Singapore after 2010/2011. So I'm starting to do my Singapore property research now. I have never come across such a comprehensive coverage on the Singapore property market, and I thank you for enlightening readers like me who want to know more :) Keep up the good work!

Young Expat's comment...
i am an overseas expat who moved to singapore a year ago and started looking out recently for property to buy as rentals started to rise all around me..i was advised to follow ur forum and since then have been impressed with all the wonderful tips exchanged in this portal..thanks to all the contributors.(Smart Buyer, the blogger here, would like to say many thanks to all these unsung heroes too)

Red's comment...
I think your reply give a rational explanation on my question. You are indeed a smart buyer and very knowledgeable.

Kate's comment...
This is a great blog filled with latest news, historical insights and good opinions that gives direction. Not the sitting on the fence type of 'pc' opinions. I love this blog. Please keep up the good work! You are really doing Singaporeans a big favour! Thank you!! I will keep on reading.

Phantasia's comment ...
Hi smart buyer,
Just wanna say thanks for your response to my query earlier in another post. And also for the very informative blog! Have learnt much from your postings! Thanks for sharing.

Smart Buyers, 10 reasons to waitFear that property price will go up forever? Here are 10 reasons to consider before you make that big commitment.......Posted by Smart Buyer(This post contains the 10 reasons that Smart Buyer first wrote for himself in mid 2007 when the property market was in a runaway euphoria, which he subsequently posted on this blog for all property buyers to consider. The arguments are supported by official data and illustrated with property supply and property price index graphs.)

Bad investments are made in Good Times
Looking at the subprime problem, it is definitely a bad news that will take time to filter down. The falling US$ is another problem that will hit the US economy. China and HK property and share mkt are 2 big bubbles.. Beware !!...Posted by km(This post contains km's first-person account of the 1998's property market crash and all the troubles that came with it - soaring mortgage rate, vacant properties with no available tenants, banks pressing for top-ups as property valuation dropped, ... his story has a happy ending of course. He'd share with you openly the lessons learnt.)

Solvency Worries STALK CREDIT-DERIVATIVES MARKET. They are now talking of SOLVENCY, not just LIQUIDITY issue .......it's really quite serious now....Posted by AnonymousHaving a house which has a big loan is a liability at this global trouble time.So far the market is still moving down slow due to the reason that many of the countries are injecting funds to buy part of the share of the banking market. The negative news continues to rise. The money is better leave in CPF and local banks to grow interests....Posted by Anonymous

During the 1995 -1998 period, the same scenerio arise..Many people cant get the HDB flat. There was the ballot system and it is just like "ti-kam", 1 out of 8 can get to buy. Due to this flocked system, many people, including those who are not so keen buyer also join the Q, paying $10 as a ballot fee, when they get balloted, then ......Posted by Anonymous

This market is definitely driven by greed and liquidity.I have never seen anything like it in my lifetime. Property prices goes up as fast a the stock market. This market is definitely driven by greed and liquidity in the asian market. What goes up must come down!...Posted by rob-502

Your Property Investment Decides Your Financial SuccessYour Property Investment may be the sole determinant of your financial success in life. One wrong move,......Posted by Smart Buyer (This post contains Smart Buyer's first-person account of the 1990's boom and bust, and how investment opportunities presented themselves in the market crash of 1998 and 2006.)

Tuesday, August 5, 2008

Singapore (private) property price is doomed to fall/decline this year and next year. The main reasons are as follows:

(1) There are still a significant number of speculators (estimated at 30%) still holding to their existing properties with the hope of making quick bucks before TOP. Unfortunately, there will be 30-40 condo developments numbering up to 20,000 units which will go TOP this year or next year. Its real unfortunate that in 2008-2009, the global economy will not improve. There will be over-supply on top of the existing sales that we see on Classified Ads every Saturday...We shall also see pages and pages of auction sales or files for bankruptcies. As such, some desperate speculators will have no choice but sell their properties at the prices which they have bought in 2006/2007 to escape from bank actions. Banks will be more stricter on extending loans and this will make life more difficult for speculators.

(2) Rentals at present moment are still steady but unfortunately getting slower and slower in uptake rates. With more and more units coming on-stream in 2008/2009, tenants will be spoilt for choice. In addition, the bleak economic prospects in US and the global economy might mean a cutdown in factory productions which ultimately will increase unemployment. We will see lesser and lesser tenants in time to come but greater and greater number of landlords willing to bring down rents.

(3) The property price in Singapore cannot be supported by the local population. This is because in 2007, property prices increase by 40% or more, mainly due to the rampant acts of speculators or enbloc sellers in the market and not by genuine homeowners. In contrast, average salary increases just an average of 5-10%. This is not consistent. Corrections are bound to happen anytime soon.

(4) Now, it seems that speculators have gone with the end of deferred payment so as the number of enbloc sellers who probably have already relocated to suburban areas. With these 2 group of buyers gone, the only ones left are the local and foreign buyers. Unfortunately, both groups of buyers are extremely cautious now with the pessimistic economic outlook. These buyers have got burnt from stock investments as well as got stuck with existing properties.

(5) Singapore is in big trouble now. We can see this with the 'aggressive activities by our ministers to tap the Middle East market and investment...hoping to get more investors from these countries to come to Singapore.'. Unfortunately, this is not going to happen anytime soon. The Middle East consumers/investors are more attuned to Muslim markets like Malaysia, Indonesia and Turkey and not Singapore. We can witness the thousands of Middle East tourists that come to Malaysia compared to a mere hundreds that come here. And bear in mind that the Middle East millionaires are more proned to dumping their properties when they see no real values in retaining them due to their huge pockets.

(6) Its true that the markets of the future belong to those rich in commodities like Middle East countries and Malaysia which are rich in oil and natural resources. Unfortunately, Singapore does not have any of these qualities. Singapore is in many ways like a miniature US. We depend a lot on the existing local talents as well as investments from overseas. Our economy is export-based with the US being our biggest customer. We will be the worst-hit when the credit crisis reach our homeland anytime soon unlike the Middle East countries which have high-priced oil to back them up. Even Middle East will be affected soon when their oil price drops when demand goes down with the recession in the long term. No one is immuned to the US economy.

(7) Property transactions in Singapore is probably the lowest in a decade in February this year. I hardly see any transactions going on in some areas of Singapore. This is a very bad sign. When there are no buyers but many sellers...and many many more sellers by the end of 2008...and economy gets worst in end-2008, and we will see even fewer buyers..unless there is a major price correction, many sellers will get burnt and lose everything including their 20% deposit to buy the property. Banks will lower their property valuations when economy gets bad and sellers will be hard pressed to compete for buyers' money.

(8) Even the IR, F1 Grand Prix, Youth Olympics etc will not do much to hype up the property market at a time of economic downturn. This is because F1 Grandprix is only held less than a week in a year so as the Youth Olympics. IR/Casinos are found not only in Singapore but also in Malaysia, Korea and US. When times are bad, no one will be gambling away their money at the casinos. In year 1996, Singapore property market experienced its most robust year, even better than 2007, where buyers pay people to queue up for units. At that time, our government even plans to have a bullet train to link to Malaysia, and are talking up plans to expand the Marina Bay area with their huge land reclaimation efforts. Government also has great plans for Tanjong Rhu area with a Marina and Marine Village planned. But the 1997 currency crisis came and every plans that we had go down buried in the grounds for 7 or more years....What makes you think that this wont happen again this year round ???

(9) Have you ever considered why Government corporations like Temasek and GIC are heavily investing in US/European banks to keep them afloat from the sub-prime crisis ?? It is because Singapore has so much stake to lose if these crisis goes uncontrolled....from the pattern, it seems that the damage is already done and cannot be undone despite the massive injections of funds from GICs and Sovereign Funds. The US economy is in debt to the tune of US$3 trillion or more....How to rectify these problems ???

(10)And so, my friends, if you still think that the already overpriced property prices in Singapore will go up further, you are indeed dreaming. Wake up to reality !

Dear Anonymous,First of all, let me clarify that the article posted here is not written by me but a forumer from:http://property.utalkitalk.com/viewtopic.php?t=5&postdays=0&postorder=asc&start=6480

My personal opinion is that mass market condos in the suburbs would probably not suffer the same degree of decline as the highly speculative prime district condos, but with the impending supply and weakening in the rental market, it'd be unrealistic to say the mass market condos in the suburbs will not be affected.

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The blogger here has been affectionately named by close allies as "Smart Buyer" but really, he's not smart. Smart Buyer just believes that being prudent is smart. That's the essence of the message of this blog and Smart Buyer hopes it'll benefit other property buyers.